TiVo: Where Duplicity Spells Dividends

Here's a great business strategy: Ask your customers what they love about your product and then take it away! Beginning in March, TiVo will begin showing ads during recorded programs. And no, your remote will not save you; pop ups and company logos (see clarification below) will actually appear when you press fast forward. (That means you'll earn yourself a 4-second TiVo banner ad for every 30-second commercial you eliminate.) Opt in (then confirm your interest a second time) and the advertisement will download your contact info. Options to buy products directly ("couch commerce") will follow later in the year.

No doubt many TiVo users are likely to see this transgression as a form of betrayal. After all, selling ads represents a fundamental shift in the customer relationship. For years TiVo built its reputation and customer base on convenience and an ad-free environment. The company even ran commercials showing a TiVo maverick throwing an ad-funded network exec out the window. "See," they implied, dusting their hands. "This is what to do with money-hungry suits!"

But it seems those mavericks liked the view from that corner office. Or maybe it's just that those execs came climbing back in.

Further Clarifications! [11/20/04]
Just got off the phone with a member of TiVo's outside PR. Here's what we discussed:

  • TiVo will be serving up advertisements.
  • The advertisements will appear on recorded programs when you fast forward through commercials.
  • Advertisements will take the form of "small tags."
  • These tags will appear for about four seconds, or however long it takes to fast forward the commercial.
  • Users will be able to click the ad to learn more about the product or service.
  • Once they've clicked through, users can opt in and pass on their contact info.

This information represents two clarifications to the original blog.
A) Rather than banner ads, as I mentioned above, "small tags" will appear. Granted, not a big difference here, but worth noting.
B) The opt in process requires an additional step of confirmation.

With any luck, I'll follow up with another blog once I've spoken to TiVo headquarters next week. Got any questions for the folks at TiVo? Post them here and I'll be happy to pass them on... Meanwhile, follow the links for more on the public reaction to the news. And thanks for your responses!

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  • Gerry

    It seems that many people think they have a right to avoid commercials. Well they do, to a certain extent. But, what will happen to TV if everybody has TiVo? The only programing available will be pay-per-view or subcription channels like HBO. The $50 a month we pay now for cable or dish goes to those who locally distribute those channels (Comcast etc.). None goes for programing. If sponsors find they are not getting the exposure they need for the money they spend, they will spend less on TV and more on the really intrusive stuff like direct marketing (phone, spam,mail)or billboards to clutter the countyside, or radio, or product placement on programs and in movies.We will have to pay for the TV programs. Somebody has to pay. Right now, we pay by allowing ourselves to be exposed to commercials. Soon we will pay with more of our hard earned dollars.

  • Josh

    Lucas Conley: Duplicity is your middle name. Do you just have poor reading comprehension, or are you TRYING to distort the truth?

    Read PVRblog for heaven's sakes. This entire controversy is a feeding frenzy of misinformation.

    How about you wait until TiVo actually releases whatever it is they're going to do before lambasting them over rumor, half truth and speculation?

    Or are you just trying to support your short position in the company?

    No wonder people hate the media.

  • The SpinMD

    Ads. No Ads. Can you bring yourself to think of a non-Tivo'ed life? For many of us like Dave who jumped on Tivo from the start, our viewing habits -- both temporal and topical -- have forever changed. Sure, we're going to be upset about the company's less-than-admiral business practices; but we'll live with them until someone comes out with a better service or someone finds a way to hack it (especially since we've voided our warranties dropping in larger drives).

    I also agree with Dave that FC or Business Week should tackle this story. It would be a good opportunity for Tivo's PR department to explain and position the company's actions, rather than letting their customers control the discussion. If the decision was monetary, fine. Rational people can understand honest logic. But, in the absence, Tivo will be left to defend its brand froma position of negativity.

  • Jim Dunn

    I wonder if this will interfere with those of us who've hacked their remotes so they can fast-forward 30 seconds at a time. Anybody seen word on this?

  • dave

    Though Paul is right about the accuracy issue, the original post is also right about the encroachment of ads.

    I have the first Tivo box. My avoidance of all the clutter (including logos) is the most valued aspect of the product. Who is kidding who? This is the first step toward interactive advertising on Tivo...I don't want it.

    So, the benefit of the bargain is changing... Tivo should make this a voluntary opt-in, or they should create a lower-priced, mid-tier package that compensates users for addition of this limited advertising.

    A brand is a promise. Tivo's was no commercial, easier-than-VCR time shifting. Pop-ups and logos are ads. Duplicitous is a good term.

    I think it would be fascinating for FC to dig into what precipitated the move. Has management changed? Did patent issuance give them such a lock on the technology that they fear no competitive reaction? Did the ad agencies who are under pressure to cope with market fragmentation and personalization dangle unreasonable money? Increasingly irrelevant networks putting pressure on? Or has this been the roadmap from the start? Superduplicitous.

    Bring on Internet Protocol TV is what I say. Make Tivo irrelevant. An eBay of content is coming where users will select content at will and producers will make it available for a microcharge. Yes, it may take 5 more years, but the entire entertainment infrastructure will face this change.


  • benzo

    so, it's a great time & opportunity for the moneyed entrepreneur to start manufacturing and producing adFree digital recording boxes. people will stop buying TiVO if there is an alternative. until a new product replaces TiVO, you will likely wreck the FF button on your remote than the PLAY button.

  • Paul

    "Beginning in March, TiVo will begin showing ads during recorded programs."

    That's not what they're doing. When you fast forward through commercials (and you can continue to fast forward to your heart's content), a pop-up box will be displayed, showing you the sponsor whose ad you're skipping. You will still speed ahead, the same as always. There are no ads during recorded programs, whether you watch them normally or fast forward through them.

    Check your facts, try to retain some dignity.